Dollar Edges Higher with T-Note Yields

Group 1: Dollar Index and Federal Reserve - The dollar index rose by +0.09% on Monday, recovering from early losses due to a jump in T-note yields, which strengthened the dollar's interest rate differentials [1] - The near-term upside for the dollar is limited as the market expects the Fed to cut the federal funds target range by 25 basis points at the upcoming FOMC meeting [1][3] - A 99% chance is being discounted by the markets for a 25 basis point cut in the federal funds target range at the conclusion of the FOMC meeting [3] Group 2: Eurozone Economic Indicators - Losses in the euro were limited due to better-than-expected Eurozone economic news, including a rise in the Eurozone Dec Sentix investor confidence index by +1.2 to -6.2, surpassing expectations of -6.3 [4][5] - German Oct industrial production increased by +1.8% month-over-month, significantly above expectations of +0.3% month-over-month, marking the largest increase in seven months [5] Group 3: Central Bank Policies - Divergent central bank policies are supportive of the euro, as the ECB has concluded its rate-cutting cycle while the Fed is expected to continue cutting interest rates [5] - Hawkish comments from ECB Executive Board member Isabel Schnabel indicated comfort with market expectations for the ECB's next interest rate move being an increase [4]